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The Case For Direct Cable Channel Subscriptions

Bloomberg is reporting that HBO Go may be coming to Apple TV this year. Sounds interesting, right? Well, guess again. Unless something changes with the release, you can only watch HBO Go if you have a cable subscription. I have to admit even though I’ve read a ton about the cable business and how the market dynamics work there, I still don’t get the benefit to HBO to not charge a subscription. Maybe it’s a contract obligation?

Since I personally don’t have a huge interest in HBO, let’s use ESPN as an example instead. According to this article, ESPN makes $4.69 per household per month from cable companies and the total average bill for sports is $8. This includes not just the other ESPN channels (ESPN2, ESPN News) but also the regional sports channels.

As I’ve mentioned here before, we cancelled all cable a while ago. In exchange we have Netflix and Amazon Prime subscriptions, streamed through an Apple TV and Roku box to deliver these channels to our television sets. In addition, I subscribe to MLB.tv each year. Netflix runs $20/month, Amazon Prime $7/month and MLB.tv $10/month [1]. That’s trading a $70 per month cable bill for $37/month. The point of this is to note that ESPN gets nothing from me.

So, ESPN, here’s what I propose: offer me streaming versions of ESPN, ESPN 2 and ESPN News for $10/month. We both win. You get about twice the rate you get from cable companies and I get sports. $47/month is still a bargain for me versus the $70 cable bill (and rising every year). I get what I want — more sports — and you get exactly what you want — money from me.

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[1] Amazon Prime and MLB.tv are billed annually but that’s what it works out to monthly.